Bartłomiej Bednarowicz, PhD Researcher at the Faculty of Law of the University of Antwerp

Background

Bratislava was chosen by the Council to host the headquarters of the newly established European Labour Authority (ELA). Initially proposed by President Juncker in 2017, the ELA’s primary goal is to simplify and enhance the fairness of EU labor mobility within the internal market. This initiative stemmed from the European Pillar of Social Rights (EPSR) and was introduced alongside other measures aimed at promoting social fairness within the EU.

The European Commission presented a proposal for the agency’s establishment in 2018, which was provisionally agreed upon by the Commission, European Parliament, and Council in early 2019. The Council formally adopted the regulation and chose Slovakia as the host in June 2019. Operations are set to commence in Brussels in October 2019, with a full transition to Bratislava expected by 2024. The official regulation was published in July 2019.

Competences

The ELA’s core function, as defined by the establishing regulation, is to assist both Member States and the Commission in effectively implementing and enforcing EU law related to labor mobility within the EU and the coordination of social security systems. Its authority is limited to specific EU acts concerning the posting of workers, free movement of workers, social security coordination, social aspects of road transport, and collaborative efforts to address undeclared work. While this list is not exhaustive and can be expanded upon in the future, it is important to note that the ELA’s mandate does not supersede existing rights and obligations of individuals or employers under EU or national laws, nor does it infringe on the authority of national enforcement bodies in these areas.

To achieve its primary objective, the ELA is tasked with several responsibilities, including simplifying access to information about cross-EU labor mobility rights and obligations and relevant services. Additionally, it is expected to foster cooperation among Member States in enforcing relevant EU law, including through joint inspections. The ELA will also mediate cross-border disputes between Member States and support cooperation in tackling undeclared work.

Organisation and the seat selection

The European Labour Authority will have a fixed structure consisting of a Management Board, an Executive Director, and a Stakeholder Group with an advisory role. The board will include representatives from Member States, the Commission, the European Parliament, and social partners. The ELA aims to employ approximately 140 staff members, including some seconded from Member States. Each Member State will also provide a national liaison officer to streamline communication and information exchange. Appointed by the Management Board for a five-year term, the Executive Director will be chosen from a list of candidates proposed by the Commission following a transparent selection process that includes a hearing at the European Parliament. The Commission intends to allocate around €50 million for the Authority’s annual budget.

Four Member States – Slovakia, Cyprus, Bulgaria, and Latvia – were in the running to host the ELA’s headquarters. In a transparent process, the Council publicized all government proposals on its website. The European Commission then evaluated each bid based on criteria such as geographical distribution, accessibility, suitability of the proposed facilities, and the city’s overall capacity to accommodate the needs of an international workforce. Slovakia, which campaigned under the slogan ‘ELA in Slovakia, a good idea’, received the majority of votes at the Council meeting on June 13, 2019, making it the first EU agency to be located in the country. As a result, the ELA’s staff will enjoy the modern L12 building in Bratislava’s ‘Eurovea City’ and its scenic view of the Danube river.

Comments

The concept of a European-wide labor inspectorate has been a long-held aspiration, particularly among worker organizations. However, it hasn’t garnered significant traction as the Commission was wary of potential pushback from Member States. The Juncker Commission, however, has reinstated social rights as a priority for the EU, proposing the groundbreaking European Pillar of Social Rights. This has led to substantial progress on the Pillar and revived discussions around social aspects of employment that were sidelined during periods of austerity and the rise of flexible labor markets. The ELA directly stems from the EPSR and aligns with the Commission’s proposals under the umbrella of cross-border employment within the EU and the Social Fairness Package.

The ELA’s potential benefits are substantial, particularly in three key areas. Firstly, it will provide valuable operational and technical support to national authorities dealing with international employment law. This includes facilitating information exchange, fostering best practices, conducting inspections, and resolving disputes. Bridging the information and cooperation gap between Member States is a significant and necessary step. In reality, national authorities often struggle to communicate and share information effectively due to bureaucratic hurdles and language differences. Having dedicated national liaison officers at the ELA will streamline communication and accelerate processes. The option for concerted and joint inspections, a new tool in the ELA’s arsenal, will further enhance cooperation, although it hinges on agreements between the Authority and the respective Member State(s).

Secondly, the ELA seeks to address the lack of coordination between national enforcement of EU employment and social security laws and existing EU agencies with relevant expertise. By collaborating with agencies specializing in areas such as workplace health and safety, company restructuring, skills forecasting, and combating undeclared work, the ELA can unlock existing potential and improve enforcement.

Lastly, the Authority will streamline cooperation by consolidating various committees and networks among Member States, potentially reducing fragmentation in this area.

However, the ELA is not a cure-all for existing systemic issues. Its effectiveness will depend largely on the proactiveness of both the ELA and its Executive Director. While there is significant room for the Authority to assert itself, some uncertainties remain. It is unclear how willing national authorities will be to cooperate within the ELA’s framework, particularly concerning joint inspections which could expose national shortcomings at an EU level. Furthermore, Member States with less stringent social security laws might be hesitant to assist the ELA in combating fraud and abuse within their territories, especially since no such obligation exists. Such cooperation could mean losing the competitive advantage of offering cheaper labor through loopholes such as shell companies.

Existing examples within social security coordination, particularly the Administrative Commission (a body of government representatives tasked with addressing social fraud between Member States), offer a mixed bag. Successful outcomes are infrequent, and some national authorities have grown disillusioned with the Administrative Commission, resorting to direct, often ineffective, communication with their counterparts in other Member States. Additionally, the ELA’s responsibilities might overlap with those of the Administrative Commission, a point of contention during ELA negotiations. Despite claims of “without prejudice”, clearly demarcating responsibilities between the two could prove difficult and lead to duplication of efforts and jurisdictional disputes. Finally, the ELA’s effectiveness in overseeing an EU labor mobility market of approximately 17 million people with a staff of only 140 remains to be seen.

In conclusion, the Authority is still in its infancy. Its success in addressing existing challenges will hinge on its adopted strategy, action plans, and leadership. While the ELA holds promise, it is too early to judge its impact and capacity. Given the high expectations, it is essential to allow the European Labour Authority time to mature and demonstrate its ability to make a tangible difference.

Barnard & Peers: chapter 20

Photo credit: www.landererova12.sk